AUDUSD – initial attempt at key daily cloud top / 200SMA supports failed, but limited bounce seen so far
The Australian dollar trades higher in early Monday’s trading after bears stalled above key 200SMA daily cloud top supports.
Subsequent bounce resulted in bullish close on Friday, sidelining immediate downside risk.
Return and close above 55SMA was bullish signal, as the indicators now acts as initial support (0.7797).
Bullish signal is developing on daily slow stochastic emerging from oversold territory, with 14-d momentum turning north in deep negative territory and rising daily cloud underpinning.
However, near-term action was so far unable to clearly break above falling hourly cloud (cloud top currently lies at 0.7823), obstructing recovery attempts, along with mixed signals from lower timeframes (1 & 4-hr).
Stronger recovery signal would be generated on regain of 0.7900 zone pivot (Fibo 38.2% of 0.8135/0.7758 downleg / double upside rejection), while the downside is expected to remain vulnerable while 0.7900 stays intact.
Renewed attempts at key 0.7750/40 zone (daily cloud top / 200SMA / Fibo 61.8% of 0.7500/0.8135 rally) would soften near-term structure, with strong bearish signal to be expected on firm break lower.
Res: 0.7843; 0.7910; 0.7937; 0.7947
Sup: 0.7797; 0.7772; 0.7750; 0.7740